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U.S. manufacturing output dips as chip shortage weighs on motor vehicles

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WASHINGTON (Reuters) – Output at U.S. factories unexpectedly fell in June as motor vehicle production dropped amid an unrelenting global semiconductor shortage.

FILE PHOTO: A worker builds a 2020 Ford Explorer car at Ford’s Chicago Assembly Plant in Chicago, Illinois, U.S. June 24, 2019. REUTERS/Kamil Krzaczynski

Manufacturing output dipped 0.1% last month after accelerating 0.9% in May, the Federal Reserve said on Thursday.

Economists polled by Reuters had forecast manufacturing output climbing 0.2% in June. Output at factories grew at a 3.7% annualized rate in the second quarter after increasing at a 2.3% pace in the January-March period.

Manufacturing, which accounts for 11.9% of the U.S. economy, is being supported by massive fiscal stimulus, low interest rates and continued strong demand for goods even as spending is shifting back to services. At least 160 million Americans have been fully vaccinated against the COVID-19, boosting spending on…

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